There exist numerous applications, including project management, in which it may be important to provide an initial evaluation of the development effort required to implement a solution based on a written proposal.
In a typical scenario, upon receiving either a RFP (request for proposal) or a project pre-analysis, the supplier/provider prepares a proposal estimating the requirements in the specification, which itself is often very poorly written and in need of a proper standard. In order to prepare the proposal, the estimate is performed using traditional and empiric methods. In one approach, a proprietary methodology is applied, in a top down fashion, requiring specialized resources and time. In another approach, the estimate is bottom up, potentially being more precise when all the data is available but, in the typical case (in which the specification is poor) the approach is very imprecise and very time-consuming.
In general, these approaches lack efficiency and consistency making it impossible for both the provider and requester to assess different proposals. In practice, very few proposals can actually be analyzed which can greatly limit the likelihood of a successful project.
To address this, the RFP may request effort estimates using some standards, such as man-hours, function points or use case points, thus allowing for external comparisons. Unfortunately, trying to apply cost estimation models, or simple measurements like function points or use case points, provides only limited results since the estimate is either too rough or the modeling takes too much time. In addition, any local knowledge (e.g., how does a current proposal compare to previously evaluated proposals) is frequently ignored in the analysis.